<economy>Survey says-Employment cost index rise but slowed.
'morning Lee:
Here is something very interesting. Looks like the FED has more ammo now for further easing of interest rates,hope they do it in Nov.Read an interview this morning with the World Bank President,he says it appears that Europe is on an upward trajectory of the business cycle where as the U.S seems have run out of steam.He continued to say that the U.S has the ability to sustain the growth momentum but needs policy initiatives particularly from the FED.Will they or won't they is the question,I certainly hope they lead instead of following the market.
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Excerpt from Bloomberg
Employment-Costs Rise Probably Slowed to 0.8% in 3rd Quarter, Survey Says
Washington, Oct. 29 (Bloomberg) -- U.S. wage, salary and
benefit costs probably increased at a slower pace in the third
quarter as the economy held to a path of more subdued growth and
low inflation, analysts said in advance of a report set for
release today.
The employment cost index rose 0.8 percent in the quarter
ended Sept. 30, according to the average of 36 forecasts in a
Bloomberg News survey as of today. That's just below the second
quarter's 0.9 percent increase.
The Labor Department will issue the report -- one of the
most accurate measures of wages, salaries and benefits -- at 8:30
a.m. Washington time. Also at that time, the Labor Department is
expected to report that first-time claims for state unemployment
benefits fell by 3,000 last week to a seasonally adjusted
315,000, more evidence that businesses are retaining workers as
the economy cools.
Workers aren't demanding higher wages, and managed medical
care has by and large helped contain benefit costs, even as the
unemployment rate hold close to a 28-year low. ''Businesses
aren't feeling any pressure,'' said Astrid Adolfson, an economist
at MCM MoneyWatch in New York. ''It's all working out.'' Labor
costs account for two-thirds of consumer prices.
Employment growth has cooled from earlier in the year, with
manufacturers cutting payrolls by more than 100,000 since
January, according to government statistics. Wage growth and the
number of hours worked also have moderated, helping keep
inflation in check.
Growth in the overall economy, meantime, has cooled to about
2 percent from more than 5 percent earlier in the year, and
inflation is barely perceptible in the producer price index and
consumer price index.
Federal Reserve
Those developments in turn have provided the Federal Reserve
room to lower interest rates to prevent turbulence in financial
markets and the slowdown in manufacturing from dragging the
economy into recession............
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